WSJ:OIL FUTURES: Crude Futures Rally On China Manufacturing Optimism OIL FUTURES: Crude Futures Rally On China Manufacturing Optimism
By Ga-Woon Philip Vahn
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Crude-oil futures rallied Tuesday in Asia tracking signs of a pick-up in China's manufacturing activity.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $100.71 a barrel at 0731 GMT, up $1.88 in the Globex electronic session. February Brent crude on London's ICE Futures exchange rose $1.46 to $108.84 a barrel.
The market tracked equities sharply higher on the first Asian trading session of 2012 as most risk-sensitive assets reacted positively to the latest manufacturing numbers from Asia's top energy consumer.
Data released Sunday showed China's official Purchasing Managers Index rose to 50.3 in December compared with 49.0 in November, higher than the median forecast of 49.0 from seven economists polled by Dow Jones.
A PMI reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 indicates contraction.
"I see industrial consumers placing new buy orders for 2012 and some investors are opening fresh long positions, taking cues from stronger equities and the euro on anticipation of a further recovery in China's manufacturing activity," a trader at Hyundai Oilbank said.
Still, some market participants said, it is too early to be bullish as the euro zone's debt problems could offset positive economic indicators from the U.S. and China.
Energy consulting firm Ritterbusch and Associates noted that a heavy slate of economic releases in the U.S. this week could lend more support to oil prices, while some renewed rhetoric out of Iran could force another rush of geopolitical risk premium into the market.
However, "we will be viewing such an advance as a selling opportunity in anticipation of a price slide to the $95-$96 area in the next couple of weeks. We still expect the euro-zone debt issue to provide primary impetus in this regard," the consultancy said.
"I'd say Europe still has more influence on investor sentiment than anything else," the Hyundai Oilbank trader said.
Nymex reformulated gasoline blendstock for February--the benchmark gasoline contract--rose 361 points to $2.6935 a gallon, while February heating oil traded at $2.9550, 408 points higher.
ICE gasoil for January changed hands at $939.75 a metric ton, up $15.75 from Monday's settlement.
-By Ga-Woon Philip Vahn, Dow Jones Newswires; +65-64154149 ; philip.vahn@dowjones.com
